Indra’s Drishtikona (Viewpoint)

Why SEMCO can’t be repeated?

Posted : May 23, 2005 at 7:32 pm [IST]

Semco is not afraid of China and I am sure there may be many. And I wish many more to join SEMCO class. Subroto Bagchi in his column in ‘Business World’ latest issue gives a real story. He refers to an e-mail that reads as given here: It was so impressive that I thought you all will like to read it and get the feel how one can excel.

“My name is Rajinder Raina. Age 45 with Engineering from BITS, Pilani plus an MBA from McGill Canada. I head the Indian operations of a 100 per cent EOU, manufacturing and exporting electrical fittings to companies like Home Depot. We do about 70 million in sales and employ about 1,400 people spread in three geographic locations. You can say, a BPO in manufacturing…”

BPO in manufacturing! Interesting. Hasn’t Rajinder heard about China? Whenever I meet CEOs from the manufacturing sector, there is this inevitable discussion about how the dragon is hissing steam through its puffed nostrils as forked tongues are whipping their cost, margins and market share. I am intrigued, and visit Rajinder’s website www.sigmaelectric.com. His company started in 1996, manufacturing electrical wiring accessories out of zinc, aluminum and copper alloys. The customer list is baffling: GE, ABB, Lowes, Hubbel and Thomas & Betts. Operating from 300,000 sq.ft facilities in Pune and Jaipur, it believes in giving its customers quality and value-addition in all areas of operations at the lowest total cost. Towards this end, SEMCO uses the latest design software, CNC machines and has a JD Edwards ERP system. But if technology could deliver competitive advantage, anyone could succeed. SEMCO realized this and front-loaded the organization with its five cardinal principles, five important habits and five key goals.

The five cardinal principles are: respect all individuals, be fair, respect company discipline and culture, be truthful, and be fearless.

The five habits are: keep promises, encourage teamwork, encourage continuous learning, be a good listener and keep the end in mind.
Finally,
the five key goals are: customer satisfaction, employee satisfaction, zero defect, high productivity and high cash flow.

No, I was not going to be conned into believing all this from an MBA from McGill. I called up Rajinder and asked for a chance to speak to his workers. A meeting was set up. I spoke with Sajid Mulani, the trade union secretary; Sanjay Jadav, former union president; and others. The youngest was 26 years of age and the oldest was 35. Average education? SSLC. These workmen told me that the purpose of enterprise is: “quality, cost aur delivery. Customer khush hona chahiye.” Sanjay, 35, says that in earlier firms, all he knew was his own sphere of work. Today, he does “vendor management”. Sajid, 26, talked about the criticality of teamwork, and Ganesh, who finished his diploma while working, said he hoped to study more. They all dream of making SEMCO a No.1 company.

A few years back, sensing the China threat, SEMCO sent its workmen to China. They visited eight factories. They returned and spoke to their comrades about the nature of the threat. An average Chinese worker made Rs 4,000 a month - amount static for 10 years. Compare that to Rs 6,000-10,000 in India and the expectation for more. The team got the message - the only way to keep his or her jobs was to build collective competitive capability and to convert each worker into a highly value-added individual. Today, SEMCO is not worried about China.

Are we impressed, corporate India?

- Indra

Category: Manufacturing |